Fidelity would soon allow eligible individuals to save a portion of their 401(k) in Bitcoin. It came as on Tuesday, the company announced about it.
Employees will only earn access to the opportunity if their employer signs off, which Fidelity says will begin rolling out in mid-2022.
While Fidelity doesn’t determine how much employees can commit to cryptocurrency in its release, the Wall Street Journal conveys that employees can elect to hold up to 20% of their retirement fund in Bitcoin. Dave Gray, Fidelity’s leader of workplace retirement offerings and platforms, also informed the WSJ that Fidelity schedules on counting support for other cryptocurrencies at some juncture in the future.
“As a leader in digital assets, we are thrilled to be the first to offer employers exposure to bitcoin for the core lineup of 401(k)s that reflects our commitment to meeting their evolving needs and our belief in the promise of blockchain technology for the financial industry’s future,” Gray said.
As stated by Fidelity, business intelligence company MicroStrategy is the first to declare that it has adopted the Bitcoin retirement fund choice. The company, led by Bitcoin supporter Michael Saylor, acquired $250 million in Bitcoin in 2020 and continued to purchase the cryptocurrency as a portion of its financial strategy. However, SEC Securities and Exchange Commission objected to how MicroStrategy accounted for its Bitcoin assets in its SEC filings the previous year. As a result, MicroStrategy utilized non-GAAP measures or reporting returns that aren’t based on the GAAP Generally Accepted Accounting Principles to account for its digital assets.
It wasn’t MicroStrategy’s first run-in with the SEC — in 2000, the SEC settled with Saylor and other executives $11 million over civil accounting fraud charges. It proclaimed the company “materially overstated its revenues and earnings” after MicroStrategy moved public in June 1998 until March 2000. The executives spent the disgorgement of $10 million and a $350,000 civil penalty separately without “admitting or denying the Commission’s allegations.”
Fidelity may encounter some pushback on its latest offering. The previous month, the U.S. Department of Labor cautioned fiduciaries against submitting an option to save for retirement in cryptocurrency “in a measure aimed at safeguarding the retirement savings of U.S. workers,” citing that this sort of investment presents “significant risks and challenges to participants’ retirement accounts, including substantial risks of fraud, theft, and loss.” President Joe Biden has also inscribed an executive order designed to drive for more crypto regulation in the U.S.